The Acme Insurance Company is In the business of insuring vehicles. The company has three processing centers in three different geogrphaic regions that handle two tyeps of insurance claims - A and B.

The company processes on the average 200 claims per day, where a day is 7.5 hours. Customers have been complaining that the company is too slow in the processing accident from the time the customer first call in the claim. The actual "touch time" to process a claim within the 43 days is 3.6 hours (processing time), indicating a lot of delays and wait time between process steps. Acme management has also noted that they are not happy with the process either claming that the cost to process claims is too high. In fact, the company actually looses money on claims processing.

Upon cursory inspection of the available data, it has been determined that the primary outcome of interest (big y) is to reduce the cost per claim. It has been determined that the primary factor driving the cost per claim is total lead-time for processing a claim (the Big X). When we view total lead time as an outcome variable ( small y relative to the Big Y), we also recognize that the small x's or factors driving total lead time are the time delways in the process( see ACme Value Stream Map). These delays are due to wasteful activites and undesiriable variances in the value stream.

We developed a value stream map of the claims process. We have indentified three areas in the value stream where delays are particularly high-- 1) the time it takes to enter a customer claim in the computer after receipt of a claim call, 2) the time it takes to assign a claim to an available adjustor once the claim has been entered, and 3) the time it takes to actaully process a claims check at the end of the process. Removving the wasteful activities driving these delays will dramtically reduce the total lead-time of the process, thus significantly reducing the cost per claim.

By reducing the total lead time of the claims process, the customer will be more satisfied while, at the same time, the total cost per claim will descrease since cost per claim is a function of lead time. This is true because most of the cost of processing a claim is fixed cost in the form of human resouces, offices, computers, ect. By reducing the total lead-time for proessing a claim, Acme can process more claims per day- increasing claims throughput. When waste is eliminated from the process, capacity is free d up in the form of human resources. This freed up capacity can be converted to financial benefits by processing more claims per day. Thus, the focus of this Lean Six Sigma project is to determine and eliminate the drivers (the x's) of the delways in the process which will reduce total lead-time. Again this will ultimately reduce the cost per claim by increasing claims throughput. Secondary effects will be happier customers and brand lift, which could produce an increase in demand for Acme insurance products over time via word of moiuth.

QUESTION

Create a cause- and effect- diagram(Fishbone) that identifies the primary outcome of interest (the big "Y") for Acme insurance company claims process(phrased as a problem). Then identify the casual factors that could be driving this outcome (small x's) Hint: two of the C and E categories will be 1) Method and 2) People. Aritculate the possible reasons for time traps ( small X's) in the diagram. Use Lean 5 whys to drill down into the casual factors.